Half-Term Analysis

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Do you have a crystal ball? Whether you do or not, our Half-Term Analysis Calculator can help you decide if a short-term or longer-term CD is more beneficial.

 A   B   
Terms to Analyze (in years):
Rate:% %
Principal:
1-year Earnings:
Half-Term Earnings:
Full-Term Earnings: 
Half-Term Deficit: 
Half-Term Deficit (Annual): 
Break-Even Rate:% 
Version:

Instructions


You Enter:
Term:Box B should be twice Box A.
Rate:Enter highest rate you can find on the respective terms
Principal:Amount you are investing (boxes should be the same)

Everything else is calculated:
1-year Earnings:Amount of interest earned during the 1st year at the different rates.
Half-Term Earnings:Amount of interest earned during the 1st term and half of the 2nd term.
Full-Term Earnings:Amount of interest earned during the 2nd term.
Half-Term Deficit:Difference in earnings between the two rates and terms.
Half-Term Deficit (Annual):Annualized difference in earnings between the two rates and terms
Break-Even Rate:Rate that is needed after the 1st term in order break even versus the 2nd term.

Example:
If you press calculate with our defaulted values, you will get a break-even rate of 2.15%. In our example, we are comparing a 2-year and a 4-year CD. If you believe rates will be a 2.15% or higher in two years, you may not want to go with the longer-term CD. But if you don’t think rates will rise that much, you may be better off with the 4-year CD.